The Paycheck Protection Program has been extended. Passed by both the House and Senate and signed by the President, the PPP will now run through August 8th. The bill for this extension passed unanimously through the Senate and was quickly adopted by the House as well so that it could be ready for the White House to sign off on. Previously, the PPP was set to expire on June 30th. Seeing numerous small businesses still struggling though, Congress decided to continue the forgivable loan program at least another month.
The PPP bill was first proposed in March as part of the CARES Act. Initially, it was funded with 670 billion to be used for small businesses that otherwise were impacted by the crisis. To date, the SBA is saying that over five million loans have been given out totaling over 550 billion. For those who were in the first wave of loan recipients, they are now nearing that point at which they can apply for loan forgiveness.
Historically, SBA loans to small businesses have been a boon to the American economy. And with the events of the past few months, of course, the SBA's role as far as loaning money to small, struggling companies has proven critical during a time when such companies need help the most.
This arguably has been the worst economic crisis since the Great Depression. The government saw no choice but to step in. The key with the PPP was that the loans would be forgivable, or at least in part forgivable. This in effect has saved so many companies from bankruptcy or potentially worse. There are still however sectors of the economy and certain industries which remain largely closed—to include the entertainment/hospitality industry and gyms. And with a new surge in cases in various parts of the nation, the reopening of these sectors remains in question. Which means, more so than many others, these types of businesses will need funds to make it through this.
Senator Susan Collins is working on legislation that would theoretically allow the businesses hurt the most to apply for a second PPP loan. As of now, a company can only be the recipient of one such forgivable loan. Senator Collins went on to explain that she foresees such funding to be used for PPE and other safety equipment, And for restaurants, for example, it could be used to purchase outdoor furniture so that they can operate at least to some extent.
She is currently working to convince her colleagues in the Senate of the dire need for this additional assistance. Collins cites a hotel owner with whom she recently met in her state. The owner said that during the Fourth of July occupancy is generally around 94%; this year that number hovered around an abysmal 6%--such businesses simply cannot survive given those kinds of statistics. Senator Collins is urging fellow senators to go to restaurant and hotel owners in their respective states and listen to the stories/hear the numbers for themselves. She remains hopeful that Congress will ultimately pass the type of meaningful legislation necessary to keep America's small businesses moving forward rather than having to shutter for good. She notes how effective the PPP has been to date and thus is urging others to realize that more needs to be done along these same lines moving forward.
Senator Collins also spoke about liability concerns. Restaurant owners in particular are frightened that if someone does contract the virus at their establishment that they will be sued, even though they adhered to all relevant state and CDC guidelines. This is a common concern for many business owners across the country. Contending with liability issues and the threat of being sued weighs heavily upon many owners' minds.
Entrepreneurs everywhere are indeed hoping for some sort of second stimulus bill that would take into account the money needed to ensure their establishments comply with safety regulations. Outfitting restaurants, hotels, and other such venues with the proper equipment is going to be critical, especially as the virus continues to surge in certain areas. And yet, being able to do this properly doesn't come cheap. Given that most businesses are struggling to make a come back at this time, they are finding it difficult to raise the capital necessary to ensure optimal safety.
History eventually will show whether or not the government did do enough to keep the bulk of America's small business from drowning. Extending the PPP deadline into August was the first step, but much more needs to be done. Especially for those businesses who were granted the money at the very beginning of the PPP—they are still on a rocky road to recovery with only uncertainty ahead. And until a vaccine is developed, uncertainty plagues the world as a whole as far as when this will end, or even if it will end. People are gearing up for a long battle. Small businesses are doing the best they can with what they have at the moment, which for some, is not a lot. The key is going to be continual government support as we strive to get the country back to some semblance of normal. Many are suggesting this normal will come later rather than sooner.
First Union Lending wants to help! If you haven't gotten a PPP loan yet, now is the time. We can help you navigate the process from start to finish. We also offer a variety of small business loan products that are suited to the client's specific needs. From short term loans to lines of credit, among other such products, we can get you the cash you need quickly. Some receive funding in as little as two days—we truly do work that fast! Even if your credit score is less than ideal, we can still help. Our goal is to see the nation's small businesses remain active, thriving, and ultimately succeed despite the situation at hand. Call today and let's get started!